Professional Development Meeting
2011 Economic Forecast
February 8, 2011
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What You Missed

2011 Economic Forecast

Big Mac Theory, psychotic or was it psychic economists and buying houses for under $150 per month all sounded like the typical joking of Dick Stevie and George Vredeveld during their 2011 State of the Economy presentation. In their entertaining and informative discussion these ideas were brought up and revealed not to be jokes but actual practices/events (actually psychologists and economists working together to explain certain behaviors – not psychic economists). After a short round of technical difficulty with the projector (becoming the norm) things got rolling with Dick beginning the discussion. In his typical style he started with a little humor and looked at the workings of the universe while interjecting parts of his life starting with his early interest in economics in grade school. Before getting to the heart of the meeting he jabbed a few of his fellow colleagues by submitting a new Theory comparing the “Handsome factor”(or lack of) starting with Alan Greenspan, continuing to Ben Bernake and then leaving it up to the audience to decide whether the trend continued up or down with George.

Since it was a power point presentation they agreed to help each other out and operate the computer to advance the screens when the other was talking. In this task Dick seemed to have more expertise since the slides move very smoothly while George presented but when Dick was presenting things got lost a few times. In an attempt to get George in line Dick threatened to roll up his notes and smack him in the back of the head when he wanted the screen advanced. They worked things out and moved on. It sounded like me and my brothers when we would go at it. Stevie’s presentation covered a lot of ground which should be expected when looking at macro- economics and the US Economy. Although he pointed out several good signs that the economy is slowly turning the corner (increases in consumer spending, lower foreclosure rates, low interest rates…) he also presented some measurements that are still unknown or questionable (US debt, oil prices, unemployment… ). He does feel that in the near future hiring will pick up significantly which would make many people happy. Overall I got the feeling that he was cautiously optimistic about the near future of the economy.

Vreldeveld humorously thrilled the audience when he stated that this year’s presentation had ½ to 1/3 fewer slides than in the past. Similar to Stevie’s presentation some measurements show positive trends while others are stayed the same. He presented some financial data that showed how interest rates changes in the early 2000’s to as low as 1% which as can be expected helped push demand for homes up and in turn put upward pressure on home values. At the same time banks were being creative with home loans beyond the standard 30 year loan, ARM’s, interest only ARM’s and yes “Pick your own payment” . In hindsight it is easy to see how the housing market created a such bubble. Both speakers spoke on the local economy. It was shown that the greater Cincinnati area is no longer mirroring the national economy as it had previously been and actually has been slower the past few years to show improvement as the overall economy picks up. A couple areas of concern are the education levels of the people in/entering the work force and the decrease in the activity and attraction of the airport. A strong airport is a big plus when trying to attract new businesses to the area. Let’s hope that companies do start hiring a little more this year and that some of the unknowns either are addressed or at least don’t worsen.